The three-month long bid battle for National Express entered its final mile today, as the consortium of venture capitalists CVC and the Spanish Cosmen family raised its offer and rival Stagecoach said it would buy the UK bus and train parts of the business.

National Express rejected the consortium's most recent offer of 450p a share last week. Today that was raised to 500p a share, valuing the coaches, buses and trains group at £765 million. National Express said it was evaluating the new offer which is conditional on getting the board's approval.

Analysts said the new offer was bound to look attractive to investors faced with the alternative of National Express raising more than £300 million through a deeply discounted rights issue in order to ensure its survival as an independent company.

National Express has been in turmoil for months, after losing its East Coast rail franchise which is being taken back by the Government and seeing the departure of its chief executive Richard Bowker at the beginning of June.

Today's deal will see Brian Souter's Stagecoach take on National Express's remaining rail franchises in East Anglia and the London suburbs C2 network, along with bus routes in the West Midlands and Dundee.This appears to have been given the nod by the Department for Transport.

Analysts said the rail franchises are probably worth just over £90 million with the bus routes somewhat less.

The Souter deal has allowed the consortium to drop most of the conditions it had attached to earlier bids.

At the same time Stagecoach said it no longer had any intention of making its own bid for National Express.

The consortium said this would be its final offer, adding that it represents an 81% premium to National Express's share price of 276p the day before it revealed the first takeover approach from First Group which dropped out of the running in June. National Express shares shot up 56.5p today to 466.8p, still well below the offer price, suggesting the stock market fears it may not succeed.

If the bid does go through, it is expected that the Cosmen family will take back the Spanish coach business it sold to National Express four years ago, becoming the British company's largest shareholder with an 18% stake. CVC would be left with UK long-distance coaches and US yellow school buses.